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Internet of Things (IoT): Applying BitCoin Technology to IoT Architecture
Morgan Stanley predicts that by 2020 there will be 75 billion devices connected to the Internet of Things (IoT). But in order for the IoT to be fully realized, we need to be able to build an infrastructure that can support networks of devices that numbering into the many tens of billions of devices.
Paul Brody, working at IBM’s Institute for Business Value and IBM Vice President, said that today’s Internet/Cloud technology just won’t cut it for IoT. The costs are too high and it’s important to be able to reach many more devices. Somewhat surprisingly, Brody proposes a solution based on technology developed by BitCoin called Block Chain.
Block Chain is Bitcoin’s transaction ledger. It contains a record for every Bitcoin transaction ever made. Each transaction is digitally signed and protected. Bitcoin uses Block Chain to enable the sending and receiving of money online without the need for a ‘Stack’ trusted third party like PayPal or Google. But Block Chain can be applied to other things. It allows interactions on the internet to become decentralized without the need for a controlling authority. Things that have previously been managed by a central authority can now be managed from a community.
Brody says that a problem that occurs when implementing IoT by “applying a centralized cloud-based business model to these devices will mean decades of expense without decades of associated revenue.” Instead, Brody says that a better approach is to use “distributed edge-based computing” which would link devices at the “edge of the network” and eliminate the need to use centralized data centers.
Brody writes that “The core of this new [IBM] approach [to managing IoT connections] is built upon the Block Chain, a model of distributed computing leveraging the architecture of BitCoin (without the financial component). Using the Block Chain we can implement the typical transaction processing work done by centralized data centers without any of the cost associated with those systems by using compute power generated by individual devices that would, in most cases, go to waste.”
